Budget 2024: Will the Old Tax Regime be Discontinued?
Salaried taxpayers didn’t see many positive changes in the last few budgets, except for the optional new tax regime in the Budget 2020, which didn’t find favour. In Budget 2024, the main focus under personal taxation was on promoting the new tax regime. Tax relief measures announced by Finance Minister Nirmala Sitharaman, were mostly focused for the taxpayers opting for the new regime. This shows that the government is encouraging more people to switch to the new regime. But does this call for the end of the old tax regime? No. The old tax regime will continue. Therefore, the taxpayers still have the option to stick with the old one.
Budget 2024 Announcements for New Tax Regime
- The standard deduction has been increased from Rs. 50,000 to Rs. 75,000 under the new regime.
- The deduction for family pension also has increased from Rs. 15,000 to Rs. 25,000 under the new regime.
- The tax slabs have been changed under the new regime because of which a salaried employee in the new tax regime can save up to Rs. 17,500 in taxes. The New Tax Regime slab rate applicable for FY 2024-25 is as follows -
| Total Income | Rate of Tax |
| up to ₹3,00,000 | Nil |
| ₹3,00,001- ₹7,00,000 | 5% |
| ₹7,00,001- ₹10,00,000 | 10% |
| ₹10,00,001- ₹12,00,000 | 15% |
| ₹12,00,001- ₹15,00,000 | 20% |
| ₹15,00,001 and above | 30% |
What Exemptions and Deductions are Available Under the New Tax Regime?
| Particulars | Old Tax Regime | New Tax regime |
| HRA Exemption | ✓ | X |
| Leave Travel Allowance (LTA) | ✓ | X |
| Other allowances including food allowance of Rs 50/meal subject to 2 meals a day | ✓ | X |
| Standard Deduction (Rs 50,000 under old regime and Rs. 75,000 under new regime) | ✓ | ✓ |
| Entertainment Allowance Deduction and Professional Tax | ✓ | X |
| Perquisites for official purposes | ✓ | ✓ |
| Interest on Home Loan u/s 24b on self-occupied or vacant property | ✓ | X |
| Interest on Home Loan u/s 24b on let-out property | ✓ | ✓ |
| Deduction u/s 80C | ✓ | X |
| Employee's (own) contribution to NPS | ✓ | X |
| Employer's (own) contribution to NPS | ✓ | ✓ |
| 80D- medical insurance premium | ✓ | X |
| Disabled Individual - 80U | ✓ | X |
| Interest on education loan | ✓ | X |
| Interest on Electric vehicle loan | ✓ | X |
| Donation to Political party/trust etc | ✓ | X |
| Savings Bank Interest u/s 80TTA and 80TTB | ✓ | X |
| Gifts upto Rs 50,000 | ✓ | ✓ |
| Exemption on voluntary retirement 10(10C) | ✓ | ✓ |
| Exemption on gratuity u/s 10(10) | ✓ | ✓ |
| Exemption on Leave encashment u/s 10(10AA) | ✓ | ✓ |
| Daily Allowance | ✓ | ✓ |
| Transport Allowance for a specially-abled person | ✓ | ✓ |
| Conveyance Allowance | ✓ | ✓ |
Also Read
Old vs New Tax Regime
New Tax Regime Deductions Allowed, Exemption List & Benefits
Form 10-IEA: Option to Choose Old Tax Regime
Income Tax Changes From 1st April 2024
Frequently Asked Questions
Quick Summary
Budget 2024 focuses on promoting new tax regime, with tax relief for those opting in. Key changes include increased standard deduction and family pension. Salaried employees can save up to 17,500 in taxes with revised tax slabs. Exemptions and deductions differ between old and new regimes, showing benefits and drawbacks. Old tax regime to remain alongside new regime for flexibility.
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